Embodiments of the present invention relate in general to the use of stored value cards. In particular, embodiments of the present invention relate to refundable stored value cards, with the option for withdrawal of cash at an agent location and the setting of restrictions on the stored value card by the purchaser. In many instances, this involves the setting of a velocity limit on transactions.
In many instances, a person may wish to give to another or keep for herself a stored value card. Such a stored value card may serve many uses: it may function as a gift towards purchases at a particular merchant or a group of merchants, it may serve as an emergency source of funds, or it may be a way of providing an allocated amount of spending to another, such as a parent providing a child with an allowance, or a son sending his family in another country money to subsist on.
A stored value card is typically offered by a merchant, a bank, or a credit card company. The stored value card typically may be used in similar manner to cash at the locations that accept the stored value card. If the stored value card is associated with a credit card company such as VISA or AMERICAN EXPRESS, it may be accepted anywhere credit cards offered by these companies are accepted.
While stored value cards present advantages, a common drawback is that, once an amount of money has been added to a card, the amount is not nonrefundable. Consider the following example, if a father wishes to provide his son with a $50 stored value card to a shoe store, he may provide the shoe store with $50 and receive a stored value card for the same amount in exchange. The father may then give the stored value card to his son with instructions to purchase appropriate footwear for the coming Spring. The son, with the stored value card, may purchase a pair of baseball cleats for $39. After the purchase, the stored value card would have $11 remaining. If neither the son nor the father wishes to use the remaining $11 at the shoe store, it may remain unused for a long period of time, possibly never being used. Excluding an additional purchase at the shoe store, the funds on the stored value card may be useless to the father and son. This remaining money may remain with the merchant or it may escheat to the state. The merchant may charge the account with a maintenance fee on a recurring basis, eventually resulting in a balance of zero dollars on the account associated with the stored value account.
In another possible situation, a first person may wish to use a stored value card to issue another person (or himself) a recurring sum of money, such as an allowance for recreation or to help with living expenses. The first person may wish to limit the types of items or services the second person, who possesses the stored value card, may purchase. The first person may wish to limit the second person's rate of spending, the number of transactions, the locations of transactions, or many other variables. Currently, the purchaser may not be able to place such limits or restrictions on the use of a stored value card. Rather, the second person may use the funds as she sees fit.
Further, if a person wishes to issue funds to another person on a recurring basis, she may be faced with the prospect of repeatedly purchasing a stored value card and sending it to the desired recipient. Such a process may take time, waste resources, and cost money to send via mail. These drawbacks may be especially pronounced if the two persons are located in different countries. Further, although the person may wish to provide another with recurring funds for purchases, she may also wish to be able to restrict the items or services that may be purchased with the funds. Repeatedly sending the recipient a stored value card may not allow for control over the goods or services purchased, especially in an international context.
Another restraint may be encountered by a person wishing to purchase a store value card for another: the stored value card may only be usable for goods and services. A person may wish to send another person a stored value card that may be used for both cash withdrawals and for making purchases of goods and services. The invention described herein serves to remedy these and other problems.